Thursday, February 15, 2007

Who Owns Ya Baby?

Firstly, I remind all of you that Reader Contest #1 is ongoing (see previous post). My personal answer nolo contendere, of course (I cannot win my own contest, now can I?) is that Prof. Irving Fisher's ghost is back. But please feel free to submit your own irreverent entries. Goldilock's gruel tastes awful cold, so grab it while it is still "just right".

Today's post will be another chart - foreign ownership of US marketable Treasury securities, i.e. the percentage of government debt (ex Social Security) that is being financed by foreigners. The Federal Reserve/US Treasury data show that as of 3Q2006 almost 50% of such debt is held by foreign entities (mostly central banks, i.e. foreign governments), double the percentage from just 10 years ago. A lamentable (and dangerous) condition for the government of The World's Sole Superpower.

Foreign ownership is not limited to just government debt, however: according to the US Treasury (PDF file) as of June 2005 (2006 data will be released March 30 2007) foreigners also owned almost 20% of all US corporate debt, 14% of agency debt and 10% of equities, also up significantly in the past 10 years (7.8%, 5.4% and 5.1% respectively).

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